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C O L L E G E O F A G R I C U L T U R E & L I F E S C I E N C E S
North Carolina Cooperative Extension Service
Employment and program opportunities are offered to all people regardless of race, color, national origin, sex, age, or disability.
North Carolina State University, North Carolina A& T State University, U. S. Department of Agriculture, and local governments cooperating.
Agricultural and Resource Economics • July/ August 2003
The Economics of Bees
Walter N. Thurman, Professor, Department of Agricultural and Resource Economics
NC State Economist
The domestic honey bee ( Apis mellifera) has
been a part of North American agriculture since
arriving with European colonists as early as the
16th century. The docile European bee found
the North American environment favorable and
quickly turned native, establishing feral colo-nies
surrounding the colonists and their descen-dants
across the continent. So ubiquitous was
the honey bee, that Native Americans referred
to the insect as the White Man’s Fly.
Colonists brought bees with them primarily
to produce honey, a remarkably concentrated
sweetener. But the activity of the honey bee is
not limited to honey production. Bees forage
among flowers for both nectar and pollen,
which they carry to their hive as food sources.
In the process of foraging, bees gather pollen
from one flower and deposit it on another, thus
promoting cross- pollination and increasing the
production of fruit and seed. The inadvertent
pollinating activity of the bees presumably was
not appreciated, or understood, by early bee-keepers.
But at some point, the value of supple-mental
pollination services bestowed by bees
came to be recognized, and beehives were
purposefully placed in fruit orchards and other
locales. The management of honey bees eventu-ally
became a specialized commercial activity,
carried out by beekeepers producing both honey
and pollination services.
The Beekeeping Industry
The fundamental feature of modern bee-keeping
is mobility. The boxes of bees seen in
fields each house approximately 30,000 bees
( one being the queen) and are transported by
truck and forklift. Because bees normally fly
no more than one mile from their hive,
targeted application of bees is possible and
bees are moved from location to location to
pursue particular nectar sources and pollen
types. This mobility and flexibility is most
clearly seen in the migratory beekeeper.
In a 1994 survey of American bee-keepers,
Hoff and Willett found that 22%
of the surveyed beekeepers were migratory,
annually transporting their bees thousands
of miles. There are several large- scale
migration routes traveled by these bees, an
important one being the route that begins
with the pollination of almond trees in
southern California in February and March.
Almonds as currently grown are highly
dependent on honeybee pollination and
beekeepers are paid $ 45 per colony or
more to place their bees in orchards during
the bloom. Also during the early spring,
the bee colonies are put into citrus or-chards,
where pollination benefits are not
great but nectar is plentiful for honey
production. After the first pollination sets,
beekeepers move their colonies north on
flatbed trailers stopping to pollinate Cali-fornia
vegetable and fruit crops along the
way. After several weeks, the migratory
beekeepers arrive in Oregon and Washing-ton
where they are paid to pollinate apples,
pears, and cherries. The pollination fees
they collect vary with the value of the
honeybee pollination and the value of the
crop’s nectar in honey production. On the
West Coast migration route, fees paid to
beekeepers range from below $ 5 per
colony from producers of clover seed ( a
2 NC State Economist
good honey crop) to over $ 50 from producers
of cranberries ( a poor honey crop for which
supplemental pollination is quite valuable.)
After the blooming season, western bee-keepers
find summer range for their colonies,
often in the Northern Plains states of the
Dakotas and Minnesota. There the hives
remain, and the bees visit sunflowers, clover,
basswood trees, and other nectar sources,
producing honey for consumption by the hive
and extraction for sale by the beekeeper. As
winter approaches, the bees are moved again,
this time to winter in the South or in southern
California. A parallel migratory route moves
along the Atlantic coast, from early citrus and
vegetable crops in Florida to blueberry bushes
in Maine.
Markets for pollination services in North
America are active and extensive. While
comprehensive data are not available, in recent
years pollination payments to U. S. beekeepers
have been estimated to be near $ 150 million
annually. The total value of honey produced
by U. S. beekeepers was over $ 200 million in
2002.
Beekeeping in North Carolina
North Carolina has a large beekeeping
industry which is unique in several respects.
Compared to the rest of the country, North
Carolina beekeepers tend to be less specialized
and smaller scale. North Carolina has the
highest population of resident beekeepers of
any state, most considered to be hobbyists
( with fewer than 50 colonies) or “ sideliners”
( between 50 and 250 colonies). Compared to
the migratory beekeepers, who specialize
primarily in pollination, North Carolina bee-keepers
typically focus on honey production
and are not migratory. One reason for the
insular nature of North Carolina beekeeping is
that access to the state by out- of- state pollina-tors
is severely limited by restrictions designed
to reduce disease problems in the state ( discussed
below). Migratory beekeepers, who travel among
states, tend to skip over North Carolina as they
travel north to avoid the certification and permit-ting
required to operate in the state.
Honey production and pollination provision
vary geographically within the state. Commer-cial
pollinators are found mainly on the eastern
Coastal Plain, pollinating cucumbers, melons,
strawberries, and blueberries. Bees are placed on
cucumber fields during the blossom period
beginning in June. On many farms, two cucum-ber
crops are harvested in a year, providing the
bees with a second opportunity for gainful em-ployment.
Fees for pollinating cucumbers
( nearly $ 40 per colony) are almost as high as
those for almonds in California, and for two
reasons. One is that cucumber farmers apply
insecticides to protect their crop from pests, but
the insecticide residue is injurious to bees.
Hence, beekeepers can face high bee loss rates
when pollinating cucumbers. The second reason
is that cucumbers are poor nectar sources, so the
honey the beekeeper can extract from cucumber-pollinating
bees is meager.
Beekeepers in the western and mountainous
part of the state are more specialized in honey
production. While they may pollinate apple trees
in the early spring, they will move their bees to
nectar sources afterward. Notable in the North
Carolina mountains is the production of Sour-wood
honey, made from the nectar of sourwood
( or sorrel) trees. Sourwood honey is light in color
with a distinctive taste and commands a price
premium of up to 200% over other honeys.
Sourwood is prized by honey connoisseurs next
only to Tupelo, another southern specialty honey.
Most producers of Sourwood honey market their
produce directly, often in a relatively unprocessed
state that includes part of the honey comb.
July/ August 2003 3
Scourges of the Industry
Beekeepers have been beset by significant
problems in recent years. While the most notable
among these is the long- awaited arrival of
Africanized bees, the most economically disas-trous
have been the recent waves of honey bee
parasites and predators. Unwelcome migrants to
North America include the twin mite scourges of
Varroa ( in North Carolina since 1990) and tra-cheal
mites ( since 1984). Most recently, and of
great concern to North Carolina beekeepers, is the
small hive beetle, an exotic honey bee predator
first seen in North Carolina in 1998 and now
widespread through the state. While these pests
can be controlled with insecticides in domesti-cated
colonies, feral bees have largely been wiped
out in most if not all parts of the continent. If you
see a honey bee in your garden, it is almost certain
that some beekeeper is taking care of the bee and
treating its home with chemical protection.
Finally, there is the issue of Africanized bees.
The African cousin of the European honey bee ( A.
mellifera scutellata) is similar in appearance to the
European bee, but is somewhat more aggressive
and less easily managed. Nonetheless, the African
race is managed and is an effective honey pro-ducer
and pollinator, but its aggressive personality
led to the exaggerated nickname of “ Killer Bee.”
In what must be one of the more regrettable
decisions in the history of entomology, African
bee colonies were brought to Brazil in 1956 to
explore their possible use in the jungle environ-ment
( to which the European bee was not well
suited). Several colonies of the African bee es-caped,
went native, and began filling ecological
niches in South America and spreading both south
and north.
The Africanized bees steadily advanced north
over the decades. The first U. S. sighting was in
Texas in 1990. Since then they have continued
their migration into the United States, but mainly
into the West. With the exception of one isolated
incident in 1987 at the Port of Wilmington, where
a colony was eradicated, Africanized bees
have not been seen in North Carolina. Simi-lar
experiences in other southeast states
suggest that Africanized bees may never
inhabit the region.
Much is unknown about the Africanized
bees. Why has their migration stalled where
it has? Will they interbreed with domestic
managed European bees, or have they al-ready?
One intriguing possibility is that the
Africanized bees might be more resistant to
Varroa than are commercial and feral Euro-pean
bees. In fact, recent evidence suggests
that feral bee colonies are on the verge of a
comeback, perhaps due to the infusion of
Africanized genetic material with greater
Varroa resistance.
Other threats to North American bee-keeping
have arisen in recent years, notably
competition from foreign producers. While
pollination is a service that cannot be im-ported
from abroad, the other major economic
product of honey bees – honey – can be.
Countries that have exported large quantities
of honey to the United States include Argen-tina,
China, and Canada. Imports first be-came
important in American markets during
the mid- 1980s when the U. S. honey program
resulted in the majority of American- pro-duced
honey being sold to the U. S. govern-ment,
and the majority of honey consumed in
America being imported. The honey program
at that time cost taxpayers over $ 100 million
per year during some years, and its expense
led to its temporary demise. A honey subsidy
program was reinstated in the 2002 farm bill.
In the mid- 1990’ s imports grew, espe-cially
from China and Argentina. The bee-keeping
industry successfully lobbied the
International Trade Commission and the U. S.
Department of Commerce to limit imports
from the two countries and eventually to levy
anti- dumping tariffs on honey imported from
NC State Economist
North Carolina Cooperative Extension Service
North Carolina State University
Agricultural and Resource Economics
Box 8109
Raleigh, North Carolina 27695- 8109
4
NON- PROFIT ORG.
U. S. POSTAGE
PAID
RALEIGH, NC
PERMIT # 2353
the two countries. As a result, imports from the
two countries shrank. Perhaps correspondingly,
honey prices now are at record levels, approaching
$ 1.50 per pound at the beehive, compared to
typical prices in the 1990s of $. 50-$. 70 per pound.
( Recent high prices also are due to drought and
production shortfalls in U. S. honey production
areas in 2001 and 2002.) The price rise appears to
have triggered an increase in 2002 imports from
countries other than China and Argentina, which
are not restricted.
Conclusion
The beekeeping industry provides a remark-able
case study of the interaction between biologi-cal
science and market process. As crop- specific
knowledge has accumulated, honey bees have
pollinated a wider variety of crops and with
greater economic benefit. Modern beekeeping
entails the balancing of these pollination opportu-nities
with the economical production of honey, a
valuable food crop. The coordination of beekeep-ers,
farmers, and consumers through pollination,
crop, and honey markets truly is amazing.
Specialization and mobility have led to the
current industry structure, but that structure is
jeopardized by the threats of bee pests and the
regulations used to combat them. Partly in re-sponse
to these factors, expanding scientific
knowledge has led to increased use of solitary
pollinators, such as the alfalfa leafcutter bee, the
alkali bee, and the Blue Orchard bee. Each has
been shown to be more efficient than the honey
bee in particular applications. But the broad
applicability of the honey bee to a large and
increasing array of crops will ensure its contin-ued
important role in modern agriculture.
References
Hoff, Frederic L. and Lois S. Willett, “ The
U. S. Beekeeping Industry.” USDA. ERS. Agri-cultural
Economics Report Number 680. Wash-ington,
D. C.: May 1994.
Muth, Mary K., Randal R. Rucker, Walter
N. Thurman, and Ching- Ta Chuang, “ The Fable
of the Bees Revisited: Causes and Consequences
of the U. S. Honey Program,” Journal of Law
and Economics ( forthcoming, October 2003).
Rucker, Randal R., Walter N. Thurman, and
Michael Burgett, “ Internalizing Reciprocal
Benefits: The Economics of Honey Bee Pollina-tion
Markets,” NCSU Agricultural and Resource
Economics Working Paper. March 2003.
N. C. State Economist
Published bi- monthly by ARE and the
Cooperative Extension Service.
Address correspondence to:
The Editor, N. C. State Economist
Box 8109, N. C. State University
Raleigh, NC 27695- 8109

C O L L E G E O F A G R I C U L T U R E & L I F E S C I E N C E S
North Carolina Cooperative Extension Service
Employment and program opportunities are offered to all people regardless of race, color, national origin, sex, age, or disability.
North Carolina State University, North Carolina A& T State University, U. S. Department of Agriculture, and local governments cooperating.
Agricultural and Resource Economics • July/ August 2003
The Economics of Bees
Walter N. Thurman, Professor, Department of Agricultural and Resource Economics
NC State Economist
The domestic honey bee ( Apis mellifera) has
been a part of North American agriculture since
arriving with European colonists as early as the
16th century. The docile European bee found
the North American environment favorable and
quickly turned native, establishing feral colo-nies
surrounding the colonists and their descen-dants
across the continent. So ubiquitous was
the honey bee, that Native Americans referred
to the insect as the White Man’s Fly.
Colonists brought bees with them primarily
to produce honey, a remarkably concentrated
sweetener. But the activity of the honey bee is
not limited to honey production. Bees forage
among flowers for both nectar and pollen,
which they carry to their hive as food sources.
In the process of foraging, bees gather pollen
from one flower and deposit it on another, thus
promoting cross- pollination and increasing the
production of fruit and seed. The inadvertent
pollinating activity of the bees presumably was
not appreciated, or understood, by early bee-keepers.
But at some point, the value of supple-mental
pollination services bestowed by bees
came to be recognized, and beehives were
purposefully placed in fruit orchards and other
locales. The management of honey bees eventu-ally
became a specialized commercial activity,
carried out by beekeepers producing both honey
and pollination services.
The Beekeeping Industry
The fundamental feature of modern bee-keeping
is mobility. The boxes of bees seen in
fields each house approximately 30,000 bees
( one being the queen) and are transported by
truck and forklift. Because bees normally fly
no more than one mile from their hive,
targeted application of bees is possible and
bees are moved from location to location to
pursue particular nectar sources and pollen
types. This mobility and flexibility is most
clearly seen in the migratory beekeeper.
In a 1994 survey of American bee-keepers,
Hoff and Willett found that 22%
of the surveyed beekeepers were migratory,
annually transporting their bees thousands
of miles. There are several large- scale
migration routes traveled by these bees, an
important one being the route that begins
with the pollination of almond trees in
southern California in February and March.
Almonds as currently grown are highly
dependent on honeybee pollination and
beekeepers are paid $ 45 per colony or
more to place their bees in orchards during
the bloom. Also during the early spring,
the bee colonies are put into citrus or-chards,
where pollination benefits are not
great but nectar is plentiful for honey
production. After the first pollination sets,
beekeepers move their colonies north on
flatbed trailers stopping to pollinate Cali-fornia
vegetable and fruit crops along the
way. After several weeks, the migratory
beekeepers arrive in Oregon and Washing-ton
where they are paid to pollinate apples,
pears, and cherries. The pollination fees
they collect vary with the value of the
honeybee pollination and the value of the
crop’s nectar in honey production. On the
West Coast migration route, fees paid to
beekeepers range from below $ 5 per
colony from producers of clover seed ( a
2 NC State Economist
good honey crop) to over $ 50 from producers
of cranberries ( a poor honey crop for which
supplemental pollination is quite valuable.)
After the blooming season, western bee-keepers
find summer range for their colonies,
often in the Northern Plains states of the
Dakotas and Minnesota. There the hives
remain, and the bees visit sunflowers, clover,
basswood trees, and other nectar sources,
producing honey for consumption by the hive
and extraction for sale by the beekeeper. As
winter approaches, the bees are moved again,
this time to winter in the South or in southern
California. A parallel migratory route moves
along the Atlantic coast, from early citrus and
vegetable crops in Florida to blueberry bushes
in Maine.
Markets for pollination services in North
America are active and extensive. While
comprehensive data are not available, in recent
years pollination payments to U. S. beekeepers
have been estimated to be near $ 150 million
annually. The total value of honey produced
by U. S. beekeepers was over $ 200 million in
2002.
Beekeeping in North Carolina
North Carolina has a large beekeeping
industry which is unique in several respects.
Compared to the rest of the country, North
Carolina beekeepers tend to be less specialized
and smaller scale. North Carolina has the
highest population of resident beekeepers of
any state, most considered to be hobbyists
( with fewer than 50 colonies) or “ sideliners”
( between 50 and 250 colonies). Compared to
the migratory beekeepers, who specialize
primarily in pollination, North Carolina bee-keepers
typically focus on honey production
and are not migratory. One reason for the
insular nature of North Carolina beekeeping is
that access to the state by out- of- state pollina-tors
is severely limited by restrictions designed
to reduce disease problems in the state ( discussed
below). Migratory beekeepers, who travel among
states, tend to skip over North Carolina as they
travel north to avoid the certification and permit-ting
required to operate in the state.
Honey production and pollination provision
vary geographically within the state. Commer-cial
pollinators are found mainly on the eastern
Coastal Plain, pollinating cucumbers, melons,
strawberries, and blueberries. Bees are placed on
cucumber fields during the blossom period
beginning in June. On many farms, two cucum-ber
crops are harvested in a year, providing the
bees with a second opportunity for gainful em-ployment.
Fees for pollinating cucumbers
( nearly $ 40 per colony) are almost as high as
those for almonds in California, and for two
reasons. One is that cucumber farmers apply
insecticides to protect their crop from pests, but
the insecticide residue is injurious to bees.
Hence, beekeepers can face high bee loss rates
when pollinating cucumbers. The second reason
is that cucumbers are poor nectar sources, so the
honey the beekeeper can extract from cucumber-pollinating
bees is meager.
Beekeepers in the western and mountainous
part of the state are more specialized in honey
production. While they may pollinate apple trees
in the early spring, they will move their bees to
nectar sources afterward. Notable in the North
Carolina mountains is the production of Sour-wood
honey, made from the nectar of sourwood
( or sorrel) trees. Sourwood honey is light in color
with a distinctive taste and commands a price
premium of up to 200% over other honeys.
Sourwood is prized by honey connoisseurs next
only to Tupelo, another southern specialty honey.
Most producers of Sourwood honey market their
produce directly, often in a relatively unprocessed
state that includes part of the honey comb.
July/ August 2003 3
Scourges of the Industry
Beekeepers have been beset by significant
problems in recent years. While the most notable
among these is the long- awaited arrival of
Africanized bees, the most economically disas-trous
have been the recent waves of honey bee
parasites and predators. Unwelcome migrants to
North America include the twin mite scourges of
Varroa ( in North Carolina since 1990) and tra-cheal
mites ( since 1984). Most recently, and of
great concern to North Carolina beekeepers, is the
small hive beetle, an exotic honey bee predator
first seen in North Carolina in 1998 and now
widespread through the state. While these pests
can be controlled with insecticides in domesti-cated
colonies, feral bees have largely been wiped
out in most if not all parts of the continent. If you
see a honey bee in your garden, it is almost certain
that some beekeeper is taking care of the bee and
treating its home with chemical protection.
Finally, there is the issue of Africanized bees.
The African cousin of the European honey bee ( A.
mellifera scutellata) is similar in appearance to the
European bee, but is somewhat more aggressive
and less easily managed. Nonetheless, the African
race is managed and is an effective honey pro-ducer
and pollinator, but its aggressive personality
led to the exaggerated nickname of “ Killer Bee.”
In what must be one of the more regrettable
decisions in the history of entomology, African
bee colonies were brought to Brazil in 1956 to
explore their possible use in the jungle environ-ment
( to which the European bee was not well
suited). Several colonies of the African bee es-caped,
went native, and began filling ecological
niches in South America and spreading both south
and north.
The Africanized bees steadily advanced north
over the decades. The first U. S. sighting was in
Texas in 1990. Since then they have continued
their migration into the United States, but mainly
into the West. With the exception of one isolated
incident in 1987 at the Port of Wilmington, where
a colony was eradicated, Africanized bees
have not been seen in North Carolina. Simi-lar
experiences in other southeast states
suggest that Africanized bees may never
inhabit the region.
Much is unknown about the Africanized
bees. Why has their migration stalled where
it has? Will they interbreed with domestic
managed European bees, or have they al-ready?
One intriguing possibility is that the
Africanized bees might be more resistant to
Varroa than are commercial and feral Euro-pean
bees. In fact, recent evidence suggests
that feral bee colonies are on the verge of a
comeback, perhaps due to the infusion of
Africanized genetic material with greater
Varroa resistance.
Other threats to North American bee-keeping
have arisen in recent years, notably
competition from foreign producers. While
pollination is a service that cannot be im-ported
from abroad, the other major economic
product of honey bees – honey – can be.
Countries that have exported large quantities
of honey to the United States include Argen-tina,
China, and Canada. Imports first be-came
important in American markets during
the mid- 1980s when the U. S. honey program
resulted in the majority of American- pro-duced
honey being sold to the U. S. govern-ment,
and the majority of honey consumed in
America being imported. The honey program
at that time cost taxpayers over $ 100 million
per year during some years, and its expense
led to its temporary demise. A honey subsidy
program was reinstated in the 2002 farm bill.
In the mid- 1990’ s imports grew, espe-cially
from China and Argentina. The bee-keeping
industry successfully lobbied the
International Trade Commission and the U. S.
Department of Commerce to limit imports
from the two countries and eventually to levy
anti- dumping tariffs on honey imported from
NC State Economist
North Carolina Cooperative Extension Service
North Carolina State University
Agricultural and Resource Economics
Box 8109
Raleigh, North Carolina 27695- 8109
4
NON- PROFIT ORG.
U. S. POSTAGE
PAID
RALEIGH, NC
PERMIT # 2353
the two countries. As a result, imports from the
two countries shrank. Perhaps correspondingly,
honey prices now are at record levels, approaching
$ 1.50 per pound at the beehive, compared to
typical prices in the 1990s of $. 50-$. 70 per pound.
( Recent high prices also are due to drought and
production shortfalls in U. S. honey production
areas in 2001 and 2002.) The price rise appears to
have triggered an increase in 2002 imports from
countries other than China and Argentina, which
are not restricted.
Conclusion
The beekeeping industry provides a remark-able
case study of the interaction between biologi-cal
science and market process. As crop- specific
knowledge has accumulated, honey bees have
pollinated a wider variety of crops and with
greater economic benefit. Modern beekeeping
entails the balancing of these pollination opportu-nities
with the economical production of honey, a
valuable food crop. The coordination of beekeep-ers,
farmers, and consumers through pollination,
crop, and honey markets truly is amazing.
Specialization and mobility have led to the
current industry structure, but that structure is
jeopardized by the threats of bee pests and the
regulations used to combat them. Partly in re-sponse
to these factors, expanding scientific
knowledge has led to increased use of solitary
pollinators, such as the alfalfa leafcutter bee, the
alkali bee, and the Blue Orchard bee. Each has
been shown to be more efficient than the honey
bee in particular applications. But the broad
applicability of the honey bee to a large and
increasing array of crops will ensure its contin-ued
important role in modern agriculture.
References
Hoff, Frederic L. and Lois S. Willett, “ The
U. S. Beekeeping Industry.” USDA. ERS. Agri-cultural
Economics Report Number 680. Wash-ington,
D. C.: May 1994.
Muth, Mary K., Randal R. Rucker, Walter
N. Thurman, and Ching- Ta Chuang, “ The Fable
of the Bees Revisited: Causes and Consequences
of the U. S. Honey Program,” Journal of Law
and Economics ( forthcoming, October 2003).
Rucker, Randal R., Walter N. Thurman, and
Michael Burgett, “ Internalizing Reciprocal
Benefits: The Economics of Honey Bee Pollina-tion
Markets,” NCSU Agricultural and Resource
Economics Working Paper. March 2003.
N. C. State Economist
Published bi- monthly by ARE and the
Cooperative Extension Service.
Address correspondence to:
The Editor, N. C. State Economist
Box 8109, N. C. State University
Raleigh, NC 27695- 8109